TiVo 2003 Annual Report Download - page 43

Table of Contents
Sarbanes-Oxley Act beginning with our fiscal year ending January 31, 2005 which will require our management to report on the adequacy of our internal
control over financial reporting and requires our independent auditors to provide a related attestation as to management's evaluation. If we are not successful
in complying with these requirements, our business could be harmed.
The current legislative and regulatory environment affecting accounting principles generally accepted in the United States of America is
uncertain and volatile, and significant changes in current principles could affect our financial statements going forward.
The accounting rules and regulations that we must comply with are complex and continually changing. Recent actions and public comments from the
Securities Exchange Commission have focused on the integrity of financial reporting generally. Similarly, the U.S. Congress has considered a variety of bills
that could affect certain accounting principles. The FASB has recently introduced several new or proposed accounting standards, or are developing new
proposed standards, such as accounting for stock options, which would represent a significant change from current industry practices. In addition, many
companies' accounting policies are being subject to heightened scrutiny by regulators and the public. While we believe that our financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America, we cannot predict the impact of future changes to
accounting principles or our accounting policies on our financial statements going forward. In addition, were we to change our critical accounting estimates,
including with respect to the recognition of revenue from our lifetime subscriptions, our results of operations could be significantly impacted.
If we lose key management personnel, we may not be able to successfully operate our business.
Our future performance will be substantially dependent on the continued services of our senior management and other key personnel. The loss of any
members of our executive management team and our inability to hire additional executive management could harm our business and results of operations. In
addition, we do not have key man insurance policies for any of our key personnel.
Our Certificate of Incorporation, Bylaws, Rights Agreement and Delaware law could discourage a third party from acquiring us and
consequently decrease the market value of our common stock.
We may become the subject of an unsolicited attempted takeover of our company. Although an unsolicited takeover could be in the best interests of our
stockholders, certain provisions of Delaware law, our organizational documents and our Rights Agreement could be impediments to such a takeover.
We are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. In general, the statute prohibits a
publicly held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Our Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws also require that any action required or permitted to be taken by our stockholders
must be effected at a duly called annual or special meeting of the stockholders and may not be effected by a consent in writing. In addition, special meetings
of our stockholders may be called only by a majority of the total number of authorized directors, the chairman of the board, our chief executive officer or the
holders of 50% or more of our common stock. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws also provide that
directors may be removed only for cause by a vote of a majority of the stockholders and that vacancies on the board of directors created either by resignation,
death, disqualification, removal or by an increase in the size of the board of directors may be filled by a majority of the directors in office, although less than a
quorum. Our Amended and Restated Certificate of Incorporation also provides for a classified board of directors and specifies that the authorized number of
directors may be changed only by resolution of the board of directors.
On January 9, 2001, our board of directors adopted a Rights Agreement. Each share of our common stock has attached to it a right to purchase one one-
hundredth of a share of our Series B Junior Participating Preferred Stock at a price of $60 per one one-hundredth of a preferred share. Subject to limited
exceptions, the rights will become exercisable following the tenth day after a person or group announces the acquisition of 15% or more (or 30.01% or more
in the case of America Online, Inc. and its affiliates and associates until such time as America Online and its affiliates and associates cease to beneficially own
any common shares) of our common stock, and thereby becomes an "acquiring person," or announces commencement of a tender offer or exchange offer, the
consummation of which would result in the ownership by the person or group of 15% or more (or 30.01% or more in the case of America Online and its
affiliates and associates until such time as America Online and its affiliates and associates
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